The government is working on a mechanism to help cash-strapped telecom service provider Vodafone Idea, which sought a waiver of Rs 45,000 crore from its adjusted gross revenue (AGR) dues, totalling Rs 83,400 crore, said Minister of State for Communications Pemmasani Chandrasekhar.
The minister, in an interview with TNIE, said it is the government’s duty to protect the ecosystem and that they want companies to flourish, not to die. Vodafone Idea, India’s third-largest telecom service provider, owes Rs 83,400 crore in AGR dues to the government and had sought a waiver of over Rs 45,000 crore, comprising interest, penalty, and interest on penalty.
“So, this is something the Honorable Prime Minister, Cabinet, and entire ministry have been discussing and will continue to discuss. And obviously, we want the companies to flourish; we don't want them to die. We want to have effective competition, but at the same time, we have to make sure we don't give away everything that they ask… Obviously, after the discussion, we will work on some mechanisms to help (Vodafone Idea),” said the minister.
The debt-laden telco wrote to the Department of Telecommunication (DoT) urging it to waive its AGR dues, warning that the company may not be able to continue operations beyond FY26. Vodafone Idea also conveyed that without government intervention, it will be unable to meet its AGR obligations, which could force the company into insolvency proceedings under the National Company Law Tribunal (NCLT). Subsequently, Vodafone Idea, along with Bharti Airtel Ltd and Tata Teleservices Ltd, filed a petition in the Supreme Court seeking relief on interest, penalty, and interest on penalty on adjusted gross revenue (AGR) dues to the government.
In the petition, it said that its AGR liability as of March 31, 2025, is Rs 83,400 crore, with an annual installment of about Rs 18,000 crore due on March 31, 2026. The company said that this payment of nearly Rs 18,000 crore, which has to be paid on a yearly basis for the next six years, is far in excess of the company's operational cash generation capacity each year. Vi’s annual operational cash generation was in the range of Rs 8,400 crore to Rs 9,200 crore in the past three years. However, the Supreme Court on May 19 dismissed the petition.
But the telco was hopeful that it would get relief from the government, as during a post-Q4 earnings call, VIL CEO Akshaya Moondra expressed his belief that the government should not be constrained in any way from offering relief if it chooses to do so. "Our view is that the government can provide relief," Moondra reiterated.
The telco, in the past, twice got relief from the government. In March 2025, Vodafone Idea got a lifeline from the government as the government decided to convert outstanding spectrum auction dues worth Rs 36,950 crore into equity. With this, the government doubled its shareholding to nearly 49%. Before this, it had approved the conversion of Rs 16,133 crore of Vodafone Idea's interest dues into equity in February 2023.
And in case it doesn’t get the relief, starting March 31, 2026, it must pay an annual installment of over Rs 18,000 crore for the next six years towards AGR and spectrum dues to the government. In 2025-26 itself, it will have to pay Rs 16,428 crore towards AGR dues and Rs 2,539 crore towards deferred spectrum dues. As per the quarterly result, Vodafone Idea’s net loss in the fourth quarter of 2024-25 widened to Rs 7,166 crore from Rs 6,609 crore in the third quarter and Rs 7,675 crore a year ago.